from the tossing-aside-great-instructors-in-order-to-cash-in-on-shady-policies dept

A few months back, we covered the story of Mike Tracy, a highly regarded animator with over a decade of teaching experience at the Art Institute of California. Tracy protested his school's mandatory ebook policy, one that saddled students with one-time use ebooks (via access codes) at a cost of $50-75 each. The push behind this policy came from the Education Management Corporation (EDMC), which manages several for-profit universities as well as operating its own e-textbook publishing company, Digital Bookshelf.

Tracy, who had taught for 11-1/2 years at the Art Institute without requiring his students purchase a textbook, was informed by administration in 2010 that he would need to select a textbook from the list provided by EDMC, something that had never been required before this point.

"Plaintiff was concerned by this notification that his course had been selected for compulsory participation in defendants' e-book program," the complaint states.

"Plaintiff had taught the course for more than a decade without the use of an officially published textbook. Plaintiff had never previously designated a textbook for the course because, in the rapidly and ever-evolving field of digital animation, which increasingly relied on cutting-edge technical developments in the larger field of computers and computer science, no published textbook adequately addressed the subject matter of the course. Available published textbooks often suffered from a lack of comprehensive teaching of the subject matter; a failure to remain relevant, containing out-of-date materials, techniques, or approaches, due to rapid and continuous developments in the field; or a failure to provide practical and/or theoretical educational content that would adequately prepare students for careers in the field. Thus, in plaintiff's professional and academic opinion, none of the available published textbooks for the course were productive, useful, or appropriate for the students."

That's the trouble with policies: they can often override knowledge and/or common sense. Seeing as Tracy had more than 11 years experience at that point (and was respected by his students, who collected more than 4,700 signatures on a petition to get him reinstated), one would think the school would value his opinion over a list compiled by a management corporation more interested in turning students into mandatory "customers" than actually providing quality education. Tracy's concern about this new policy led him to do some research, which uncovered some more mercenary ugliness on EDMC's part.

Tracy says he found that students taking courses requiring an e-book were charged $50 for an "electronic resources fee," and $75 if the course required two e-books.

"Students were not allowed to opt out of the automatic fee, which was charged to their tuition accounts without further notice," the complaint states.

Tracy claims this policy prevents students from buying their books elsewhere, a right guaranteed in the student handbook.

"Moreover, the policy effectively eliminated all other potential ways that students traditionally saved money on text purchases, such as buying used texts or trading texts after completing a course, because access to the mandatory e-books was limited to the particular student charged, in a single-use only basis."

Mandatory fees plus elimination of used books sales. It's a nice racket if you can get in on it. Tracy claims most students were unaware they were being charged these mandatory fees and that other instructors felt the e-textbooks were unsuitable for their classes and never used the "provided" texts which, oddly, worked out perfectly for EDMC and the Art Institute.

"More disconcerting still, plaintiff discovered that if the student never logged on and activated the e-book account for the course, defendants retained a higher percentage of the profit from the sale of the e-book under the terms of their contract with the e-book publisher than if the student had actually activated and made use of the e-book account," the complaint states.

That's just bizarre. As a digital product, prices shouldn't fluctuate depending on actual "use" of the texts. If this is true, it's as though the intention was to push as many useless and needlessly expensive e-textbooks on students as possible in hopes of a greater "return" of "unused" textbooks. Beyond some minor account maintenance, it's hard to see many expenses being incurred by the use of e-textbooks, which makes the higher profit margin on unused "books" inexplicable.

Tracy filed complaints with several government agencies, including the Department of Education. On August 10, 2010, Tracy was threatened with firing unless he complied with the new policy.

"During the meeting, plaintiff, again, reiterated his concerns about defendants' e-book policy, including explaining his belief that it resulted in falsely or fraudulently utilizing federal and state funds (by way of the government-provided grants and loans to the students) through an unfair pricing scheme for the e-books, from which students were unable to opt out. Plaintiff stated that he believed the letter threatening his termination was a retaliatory attempt by defendants to silence his opposition to the e-book policy and to deter other faculty from coming forward and voicing opposition to the same. Plaintiff also believed the termination threat was a signal to him and his colleagues that defendants would not tolerate any type of questioning of their policies, without regard for whether these policies were in violation of the law and fair and ethical business practices," the complaint states.

Tracy suggested alternatives to the new policy but they were rejected. Believing that his firing was imminent, he posted a message on his personal Facebook account regarding the situation, thanking his students and colleagues for the time they spent together during his career. This apparently was too much for the Art Institute to take.

Four days after the meeting, the Art Institute fired him, "mischaracterizing his continued opposition to their e-book policy on the grounds that it was unlawful, unfair, and unethical as 'insubordination,'" Tracy says in the complaint.

He claims the school retaliated against him for objecting to its unlawful e-book program, refusing to participate in the program, and reporting the program to the government.

While we wait for this to play out, there are a couple of issues to keep an eye on. Considering EDMC's past legal issues (it's currently being sued by the Department of Justice for illegal recruiting and false claims) and it's possible violation of the Higher Education Opportunity Act (which states that textbook publishers must unbundle their core educational content from optional add-ons like study guides, homework systems and, possibly, mandatory electronic versions of textbooks), Mike Tracy could end up with a rather swift settlement should EDMC wish to remain out of the judicial limelight.

While this lawsuit is not directly about textbook publishing or for-profit schools, it does serve the purpose of shining some sunlight on the intertwined workings of businesses like EDMC, which both owns and supplies textbooks to its colleges. This limitation of options, and the reliance on accounts, passwords and one-time use e-textbooks, prevents students and instructors from choosing anything but the most profitable (for the management and administration) path.

Exposing EDMC's "policies" for what they are -- the building blocks of closed ecosystem -- will hopefully help steer future students away from post-secondary for-profit schools run by the corporation. As for Tracy, hopefully the suit goes his way and, at the very least, he ends up at a school that appreciates his talents.

Re:

Key words: "Corporation" and "for-profit".

Wonder why it is, though Techdirt daily provides examples of corporations gouging as much as they can, that some here still cling to the notion that unfettered "capitalism" is good? I suppose it's because of ignorance of history, were born into a well-regulated version and never subject to the more pure forms, plus the endless war (waged by plutocrats) against unions and requirements for corporations to distribute some of the profits to those who produce them. And culturally, you all want to imitate The Rich, live high yet produce nothing, an almost literally feudal entitlement to make demands on the poor. -- And Techdirt never even hints of the really big thieves of Wall Street and Chicago Merc, who daily get away with billions -- without even a transaction tax.

Anyhoo, yawn: yet another story of corporatized fraud and economic tyranny.

Re: Key words: "Corporation" and "for-profit".

out_of_the_blue - thank you for a decent, sensible and well-reasoned post. Please do many more like this - no unnecessary ad-homs, no automatic railing against whatever the article is against.

I will point out that this blog is tech-based, so has no reason to chase every single instance of capitalistic abuse, whioh would be a bit like complaining about a particular broken straw in a haystack...

Re: Key words: "Corporation" and "for-profit".

Re: Key words: "Corporation" and "for-profit".

Tell me more about how higher education in this country is "unfettered capitalism" . . .

The government gives corporations all the monopoly powers they need to screw you, and you blame not the government, but "capitalism", and call for more government involvement. Whenever you feel that corporatist truncheon coming down and beating you bloody, you can at least take some pride in the fact that it's because of you and people like you who worked tirelessly to make it happen.

Re: Re: Key words: "Corporation" and "for-profit".

Corporate empowerment and corporate regulation are two different things. The government--or at least, our elected officials, many corrupted by corporate money--is partly responsible, but capitalism isn't perfect, especially when lacking in regulation. Even more so with stuff like Citizens United.

Re: Re: Re: Key words: "Corporation" and "for-profit".

Well Citizens United is completely logical, though it has some unthought of implications. The question should be how to fix the holes in especially political donation laws and how to overall reduce the value of donating. I was thinking of something like separating campaign fund and politician so the politician cannot know who donated and how much (making it illegal to tell where the money came from, will completely screw a range of lobbyists since they would have to rely on information to gain favours instead of economic incentives. It would also break the extortion politicians away from their common deeds since they no longer can find out if the money actually gets delivered).

PACs need some clear laws around spending to make them useful in getting more people out voting! Negative ads doesn't really do that.

Re: Re: Re: Re: Key words: "Corporation" and "for-profit".

I don't think Citizens United is logical at all. Every physical person has a limit on campaign donations. Joining with other people on a cause should allow them to pool that limit, not get another on top of it. Companies and unions are not people, they are groups of people. My wife and I should not be allowed to donate as both individuals and as a unit, even though together we make another legal entity.

Re: Re: Re: Re: Re: Key words: "Corporation" and "for-profit".

Here are some of the facts of the case, extracted from the opinion, just in case you've never actually read it:

In January 2008, Citizens United released a film entitled Hillary: The Movie. We refer to the film as Hillary. It is a 90-minute documentary about then-Senator Hillary Clinton, who was a candidate in the Democratic Party's 2008 Presidential primary elections. Hillary mentions Senator Clinton by name and depicts interviews with political commentators and other persons, most of them quite critical of Senator Clinton. Hillary was released in theaters and on DVD, but Citizens United wanted to increase distribution by making it available through video-on-demand.

. . . .

To implement the proposal, Citizens United was prepared to pay for the video-on-demand; and to promote the film, it produced two 10-second ads and one 30-second ad for Hillary. Each ad includes a short (and, in our view, pejorative) statement about Senator Clinton, followed by the name of the movie and the movie's Website address. Citizens United desired to promote the video-on-demand offering by running advertisements on broadcast and cable television.

You know, I've heard a lot of crazy characterizations of this case, from people who do not seem very acquainted with the actual facts.

Re: Re: Re: Re: Re: Key words: "Corporation" and "for-profit".

Citizens United had nothing to do with campaign donations. This is a persistent myth amongst people who didn't look that closely into the case, and instead relied on the mass hysteria surrounding the decision.

Re: Re: Re: Key words: "Corporation" and "for-profit".

Corporate empowerment and corporate regulation are two different things.

On the contrary, they are precisely the same thing. "Regulations" are exactly how corporations are empowered. Ask yourself who writes the regulations, and in whose interest (Hint: Not yours or mine).

And the furor over Citizen's United is precisely the kind of stuff that drives me crazy. People are all in up in arms that the supreme court said that the government can't ban political speech merely because it came from a group of people instead of a single person.

"Once again, Citizens United had nothing to do with campaign donations."

And multinational corporations have always been making donations to PACS and dark money has always been in existence because these are not new things created as a result of the Citizens United ruling. Very interesting.

Re: Re: Key words: "Corporation" and "for-profit".

I'm sure that the Art Institute of California would love nothing more than to sweep this episode under the rug, so to speak, by settling out of court, but they had to know that this was coming. The cat's out of the bag and the damage has been done. One experienced teacher's career has been thrown under the bus just because he exposed the school's underhanded swindling scheme.

While I disagree with the school's policy, it does seem like he was basically interfering with the school's operation (whether their new standards are prudent or not is another issue). I don't think it was wrong for him to be terminated at that point. What worries me about this case is that, at my old college, we fought extremely hard to get more ebook options available to students, and one of the biggest barriers we had was that professors did not want them, even when students did. Professors had academic privilege in book selection, so we had to change their mind or wait for them to retire. Either way, looks bleak for making progress. If the administration at my school saw this, they would undoubtedly see it as another reason why they shouldn't touch ebooks with a ten foot pole, while the professors would come to a similar conclusion. The end result is both sides deciding not to take advantage of new technology.

If only the EDMC had used a better, less heavy handed policty instead. If they could have given a reason for students and professors alike to use the books, perhaps this could have been avoided. Honestly, though, after dealing with this issue on multiple campuses through advocacy work throughout my state, I think that unless you force professors to use ebooks, we will not see them used mainstream in colleges for at least another decade, if not two.

Re:

What about the conflict on Interest in this case, where the book publisher and the college administration belong to the same corporation. It does not bode well for the quality of the books when the publisher can dictate use of their own books to colleges.

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Naturally, it's why I disagree with the school's action. I'm not trying to excuse their conduct, it's more a comment on how this could have some unfortunate side effects. I spent almost two years advocating for more e-book options for students among two year colleges in Minnesota, and we managed to change some minds, but not enough. The consistent problem we ran into was that the school would say they wanted ebooks, the students would say they wanted them, and the professors would ramble about how ebooks aren't real books and are bad for education somehow. In Minnesota, at least, professors can pick whatever book they want for the course, period. So without changing policy to force them to use the book, we're unlikely to see a change until the old guard has retired.

The school administrations are all about minimizing risk, and this lawsuit is just another reason for them to say ebooks aren't worth it. The school handled this very poorly, in a very shady manner (as schools often do), and the professor protested in a way that certainly brings attention to the issue, but is still misconduct in terms of a work environment.

The whole situation is rather unfortunate for progress with ebooks, is all I was getting at.

Re: Re: Re:

The whole situation is rather unfortunate for progress with ebooks, is all I was getting at.

The fact that the books were ebooks is immaterial, the situation would be the same if they were paper books.

The more significant questions are should administrators be able to restrict the books that can be used, and should the same people be involved in both running colleges and publishing books. The combination is likely to destroy any real value in the resulting education, both in the quality of materials and by driving out competent teachers.

Re:

The problem with them firing him is because he refused to comply with an operation that he had reason to believe was illegal--which I believe makes terminating him illegal itself.

Also, I totally agree, eBooks are the future, they should be accessible, colleges should find ways to get them in courses--but only when they're welcome. They should fit the curriculum, be the best sources out there and not cost students more money, especially since they're digital files on the cloud instead of physical books that have to be manufactured and distributed! EDMC's eBooks are unfit, inferior, forced and overpriced. That professors were forced to select a book says enough.

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The problem with them firing him is because he refused to comply with an operation that he had reason to believe was illegal--which I believe makes terminating him illegal itself.

Also, I totally agree, eBooks are the future, they should be accessible, colleges should find ways to get them in courses--but only when they're welcome. They should fit the curriculum, be the best sources out there and not cost students more money, especially since they're digital files on the cloud instead of physical books that have to be manufactured and distributed! EDMC's eBooks are unfit, inferior, forced and overpriced. That professors were forced to select a book says enough.

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That's the problem. The Art Institute did not allow any options. It was mandatory.

You may want to read the article again, but here's the relevant paragraph:

"Plaintiff had taught the course for more than a decade without the use of an officially published textbook. Plaintiff had never previously designated a textbook for the course because, in the rapidly and ever-evolving field of digital animation, which increasingly relied on cutting-edge technical developments in the larger field of computers and computer science, no published textbook adequately addressed the subject matter of the course. Available published textbooks often suffered from a lack of comprehensive teaching of the subject matter; a failure to remain relevant, containing out-of-date materials, techniques, or approaches, due to rapid and continuous developments in the field; or a failure to provide practical and/or theoretical educational content that would adequately prepare students for careers in the field. Thus, in plaintiff's professional and academic opinion, none of the available published textbooks for the course were productive, useful, or appropriate for the students."

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"it does seem like he was basically interfering with the school's operation"

If the school's "operation" requires employees to be complicit in illegal activities then interfering is an obligation.

Terminating an employee for asking about the legality of school policy is an indirect admission of guilt with respect to the illegal activity.

I have heard many claims about how private business can run schools more efficiently ... I guess it depends upon what is being measured. In this case, one could claim that the for profit school was very efficient at extracting money from students - much of it through government loans. Possibly this is why they want to eliminate government loans - so that the practice is less illegal.

@Anonymous Coward, Dec 7th, 2012 @ 6:57am

Im sorry, but why is needed to "force" the teachers to adopt e-books? Would not be better to just try to disponibilize the content in paper and digital forms? And personally, i agree that teachers should choose the books that they will base their courses, with some other references, preferencially in public domain, that the students could use for their studies.

That's just bizarre. As a digital product, prices shouldn't fluctuate depending on actual "use" of the texts. If this is true, it's as though the intention was to push as many useless and needlessly expensive e-textbooks on students as possible in hopes of a greater "return" of "unused" textbooks. Beyond some minor account maintenance, it's hard to see many expenses being incurred by the use of e-textbooks, which makes the higher profit margin on unused "books" inexplicable.

I'm only speculating, but it could be a licensing issue, i.e. the book is only licensed to the student - and its author compensated - if the book is used.

Unintended consequences of generous student loans

Any guesses about the government student loan default rate for Art Institute of California students?

I've come to the conclusion that the US student loan system has a ton of unintended bad outcomes. Gut it -- perhaps by getting the government out and making it more realistic to discharge loans in bankruptcy.

Without that subsidy, very many schools would have to either dramatically lower tuition (and other expenses) or provide a really high-utility education.

Schools that primarily function to scam students out of student loan money would wither or adapt, perhaps by actually providing useful educations and successful job-search assistance.

And future students would be in a better place to get on with life -- buying houses and starting families -- without the delays and burdens of student loan debt. And could buy me another beer.

Re: Unintended consequences of generous student loans

irony...

"no published textbook adequately addressed the subject matter of the course. Available published textbooks often suffered from a lack of comprehensive teaching of the subject matter; a failure to remain relevant, containing out-of-date materials, techniques, or approaches, due to rapid and continuous developments in the field; or a failure to provide practical and/or theoretical educational content that would adequately prepare students for careers in the field."

Ironically, the use of ebooks would help to remedy the situation he criticizes. Also, seeing as he didn't use a textbook for 10 years (how rare is that!), a smart guy would have put together his own 'official textbook', partnered with the EDMC, and then made a little money on the side.

Digital Bookshelf

In 2010, I had the unique position of being both an EDMC employee and student. When forced purchases of Digital Bookshelf was foisted upon the student body, I complained to administration and even to the PA Dept of Consumer Protection. Seven months of fighting this abusive policy went nowhere and so I quit my position as instructor at Ai and quit as a student at Ai Pittsburg-online. What kind of company tells you that you cannot exercise your right as an American consumer and buy your books from whom you want and in what form you choose? The answer, of course, is one that has no respect for anyone's rights: EDMC! Very happy to see that finally, these criminals will have to answer for their abuse.

Re: Digital Bookshelf

As of this moment, Ai students are still forced to buy these etextbooks, being told that regular universities have them as well, justifying the forced charge. As well as not not notifying students of the ebook policy when they register, they "give a grant" when some bullsh*t charge is disputed. TLDR: nothing has changed.